“If we were in harvest you’d be hearing screaming by farmers, but we’re in postharvest, except for a few isolated things.”
– Ian Wishart, KAP
Manitoba farmers are getting the diesel fuel they need despite a shortage in Western Canada that has left some fuel stations dry and many long-distance truckers scrambling.
Increased diesel demand and production problems at three Alberta refineries are being blamed for the shortage, which, according to published reports, is most acute in Alberta.
Diesel supplies aren’t expected to get back to normal until late next month or even December. Meantime, Petro-Canada, which owns one of the troubled refineries, is importing fuel from Eastern Canada and the U. S. and is even looking to Russia for potential supplies, said company spokesperson Sneh Seetal.
“We are focusing (diesel fuel) distribution from larger, more efficient sites to serve the most customers and manage how much and when customers can fill up so we spread out supplies among more customers,” she said in an interview from Calgary Oct. 21.
Diesel fuel supplies are tight in Manitoba, but Keystone Agricultural Producers’ (KAP) president Ian Wishart said he hasn’t heard of farmers not being able to get fuel. The demand for farm fuel probably peaked a month or so ago.
“If we were in harvest you’d be hearing screaming by farmers, but we’re in postharvest, except for a few isolated things,” he said.
Most farmers aren’t filling their fuel storage tanks now either, for two reasons. One is the transition at this time of year to winter fuel and the expectation that diesel prices will fall in tandem with the drop in world crude oil prices, which last week were under US$67 a barrel.
Even if farmers can get fuel, tight stocks put a damper on haggling over the price, said Lenore-area farmer Keith Gardner. Farmers are just happy to get the fuel.
“It (tight supplies) certainly makes us all nervous,” he added. “When our (storage) tank gets down we start phoning to get on the (delivery) list.”
Gardner said he hasn’t heard of any farmers having to wait for fuel. He suspects diesel supplies in western Manitoba are tighter than further east, due to the jump in oil exploration in the area.
When it comes to securing fuel, truckers haven’t been as fortunate as farmers. Carriers recently had their fuel rationed as much as 10 to 50 per cent, according to David Bradley, president and CEO of the Canadian Trucking Alliance.
“The card-lock privileges for all new accounts were suspended by at least one oil company and the hours that card-lock service was being made available to existing customers were being restricted,” he wrote in a commentary last week.
An official with one Petro-Canada bulk dealer, who asked not to be named, said the company is making it a priority to supply regular customers.
That’s the tack that Pembina Co-op, headquartered in St. Leon, is taking.
“There is a lot of commercial (trucking) business looking for access to diesel, but our position here is our first priority is to our existing customer base and for us the majority of them are farmers,” Pembina Co-op’s general manager Dale Pouteau said.
“We’ve been able to keep ahead of the game here, but it is tight. The biggest concern would be if people start hoarding product.”
The fact that Pembina Co-op hasn’t been flooded with calls for fuel from farmers normally supplied by Petro-Canada and Esso bulk dealers indicates those firms are also meeting the needs of their farming clients, Pouteau said.
“Everybody seems to be getting enough fuel to supply their core business,” he said.
“We haven’t had to tell anybody ‘no’ yet.”
Suncor’s refinery at Fort McMurray was the first to drop diesel production after running into production problems. Petro-Canada’s refinery was taken offline for regular maintenance and so it could process oilsands’ oil, but more work was required than expected. Petro-Canada’s refinery was supposed to be producing diesel again by now to help fill the void left when Imperial Oil started regular maintenance on its refinery.
“It’s a pretty unique situation where you have three major producers of diesel all down at the same time,” said Scott Banda, Federated Co-op’s vice-president for corporate and legal affairs.
Federated Co-op’s refinery at Regina is producing as much diesel as it can to help fill the gap, he said.
“We’re running at capacity right now,” Banda said.
“The trucks are rolling 24/7 moving product out of Regina.”
Just as the local co-ops focus on meeting the fuel needs of their members, the same applies to Federated.
“The bottom line from our perspective is we’re doing the best we can to supply our (co-op) retails,” Banda said. “There is no question the demand and the pull on product is intense everywhere across the Prairies right now, particularly in Alberta, but as Federated (Co-ops) our priority remains our owners, and that’s our retails, so I would think your (supplies) are still doing fairly well in rural Manitoba.”
Both Wishart and Bradley are asking why there’s a shortage of fuel in the oil-rich West.
“The time has come for meaningful and open discussion about refining capacity in this country,” Bradley wrote.
Wishart agrees. The same questions can be asked about the lack of investment in nitrogen-producing capacity, he added. Wishart said he wonders if the lack of investment is just a way to keep fuel and fertilizer prices artificially high. [email protected]